StubHub Sues Ticketmaster and Warriors Over Resale Policy

StubHub has filed an antitrust suit in federal court, alleging an "anticompetitive scheme" that forced Golden State Warriors fans to use only Ticketmaster when they wanted to resell tickets.

The "battle of the scalpers" is how the Washington Post referred to the lawsuit, which was filed Sunday in U.S. District Court and names the basketball team and the ticket vendor as plaintiffs. StubHub, an online ticket marketplace, is a division of San Jose's eBay.

They wanted to "create and exploit a captured monopoly secondary ticket exchange," the suit says.

"If you are a Warriors fan and you want season tickets, you have one choice: buy them through Ticketmaster," says the suit, which charges that the "conspiratorial actions" have been aimed at reaping service fees and markets that wouldn't be possible in a competitive environment.

The numbers of listings for Warriors tickets on StubHub has plunged 80 percent in the last year alone, the suit says, and the number of tickets sold through StubHub has decreased by more than 40 percent in the same period of time.

And it's happening during the best season the Warriors have ever had.

"[The fans are] being put up against the wall," StubHub lawyer Michelle Fang told KQED's Julie Small. "They want to use StubHub, and they feel like if they do, their season tickets are going to be canceled and they're really afraid."

According to the suit, their fears are well founded: It alleges that the Warriors and Ticketmaster have creating a "Hobson's choice" by canceling or threatening to cancel regular season and playoff-game tickets if fans choose to resell their tickets through a  rival exchange, such as StubHub's.

"This is not just a problem for Warriors fans. It is a looming threat for all sports fans," says the suit.

And if the practice is allowed to continue, the suit adds, "Ticketmaster and other sports franchises will have the economic incentive to engage in similar anticompetitive efforts to artificially reduce competition" in secondary ticket exchange services for their respective teams’ tickets.

Fang elaborated: "We are seeing this behavior with other teams and in other leagues. Definitely the most impact we've seen has been with the Warriors, so that's where we've focused our energy. But this does seem to be a growing trend."

In a statement issued Monday evening, Ticketmaster said it had reviewed StubHub's lawsuit and believes it is "totally without merit."

Jared Smith, president of Ticketmaster North America, said:

“We are disappointed that StubHub has filed a baseless lawsuit that asks the courts to help prop up its business against true fan-friendly competition. NBA teams like the Golden State Warriors have implemented ticket exchanges powered by Ticketmaster because they want ticket resale to be a secure experience, not an opportunity for scalping and fraud. The exchanges are growing in popularity because Ticketmaster and its partners have worked hard to make ticket resale much safer and more transparent, uniquely serving true fans. Ticketmaster does not force any customer to resell tickets on any particular platform and will vigorously defend these specious charges.”

StubHub made repeated attempts to come to an agreement with the Warriors to stop the practice and also notified Ticketmaster, Fang said,

"So this has been a real long time coming," she said.

ESPN said the lawsuit could turn into a landmark case.

The ESPN story also said: "The Warriors and Ticketmaster have had a relationship since 2012 whereby they share fees from the team's resale market. But sources told ESPN.com that the team got more restrictive and adamant about selling outside of their platform this season, as the Warriors have been one of the best teams in the NBA."

The new lawsuit represents just the latest move in the resale war between StubHub and Ticketmaster.  A Billboard story that came out in October described new strategies employed by both companies.

It remains to be seen whether the case will set a precedent. As for the fans, one ticketholder cited in the lawsuit said the sales policy "seemed more like a Mafia tactic . . . than [that of] a supposedly fan friendly sports franchise.”